Tucson Development Fees Rise as Builders Warn of Added Cost Pressures
TUCSON, AZ (May 21, 2026) — The Tucson Mayor and Council moved forward Tuesday night with higher development review and permitting fees, adding another cost consideration for builders, developers, and contractors working inside the city. These Tucson Development Fees are becoming a significant factor in the overall project budgets.
At Tuesday night’s Tucson Mayor and Council meeting, the Council approved a package of development review and permitting fee increases that will take effect July 1, 2026. The vote was reported as 4-1, with Council Member Paul Cunningham voting no and Vice Mayor Lane Santa Cruz absent. The item was Ordinance No. 12253, which tied Planning and Development Services fees to development review, building permits, and related services.
The fee changes affect Planning and Development Services Department reviews, building permits, site review, zoning, subdivision, grading, development packages, floodplain permits, sign permits, rezonings, and related development approvals. The city has described the increases as part of a broader rate-and-fee package intended to better align fees with the cost of providing city services.
Under the proposal, most non-valuation permits will increase by 5%, while design professional review fees will move toward full cost recovery. The package also includes increased fees for floodplain use permits, sign permits, rezoning and special approvals, as well as new fees tied to the Community Corridors Tool and development package permits. The city will also reinstate the code enforcement reinspection fee at $200.
City officials said some targeted increases were designed to bring fees closer to the cost of service and to peer-city levels. But regional comparisons are difficult because Tucson, Marana, Oro Valley, Sahuarita, and Pima County structure development fees differently. Tucson already uses ICC-based valuation tables to calculate building permit fees, but the city has been phasing in updates rather than immediately adopting the most current ICC values. The July 1, 2026, change moves building permit fees to the current ICC Construction Valuation table, raising the valuation basis used to calculate permit fees by an average of 11.5%.
The development fee action came as part of a larger citywide package involving Environmental Services, Planning and Development Services, Transportation and Mobility, and Tucson Water. The city issued its notice of intent in March, following a vote by the Mayor and Council, and held public feedback meetings before the May 19 public hearing.
The Department of Transportation and Mobility also proposed changes that may affect contractors and developers working in public right-of-way. Those changes simplify the current fee structure from 37 fee types to 23 and move more permit and staff review charges toward a standard application fee plus hourly staff time. The city also proposed new loss-of-use and loss-of-value fees for temporary reductions in roadway capacity and pavement degradation resulting from right-of-way work.
Builders and development industry representatives raised concerns that the increases will add costs at a time when Tucson is trying to encourage more housing production and infill development. The concern is not only the percentage increase in individual fees, but also the cumulative cost of higher review, permit, valuation, and right-of-way charges layered onto already-rising construction, financing, and insurance costs.
Representatives of the Southern Arizona Home Builders Association, the Arizona Multifamily Housing Association, and the Greater Vail Area Chamber of Commerce testified against the increases, warning that higher review and permitting costs would add pressure to housing and commercial projects at a time when development activity has already slowed. The Arizona Multifamily Housing Association also pointed to a decline in Tucson apartment permitting, underscoring concerns that additional costs could further weaken the housing pipeline.
During the public hearing, representatives from the development industry argued that the timing of the fee increases is especially difficult because housing and commercial development activity has softened, making it harder to absorb additional costs.
The policy argument before the city was familiar: city departments say fees need to better cover the costs of staff review and service delivery, while the development community warns that higher costs can ultimately be passed through to homebuyers, renters, and commercial tenants, or make smaller projects harder to pencil out.
Council members also discussed fee relief for affordable housing projects, directing city departments to develop options and return with a proposed ordinance. The city is expected to review the effect of the new fees after implementation, particularly as Tucson continues to face pressure to expand housing supply while maintaining city service levels.
The fee increases are scheduled to take effect July 1, 2026.
